PNG hosts APEC and prioritises self-sufficiency and diversification

The future remains somewhat uncertain for Papua New Guinea. The economic downturn resulting from lower global commodity prices and the completion of the PNG LNG project have led to some in criticism of the current administration, with accusations of mismanagement.

Despite this, Prime Minister Peter O’Neill secured a fourth term in the mid-2017 elections, winning 78% of the votes cast in his district. Some key challenges face political decision-makers, with the electorate calling for improvements to social and economic infrastructure, the promotion of inclusiveness and efforts to combat both real and perceived corruption. Despite these difficulties, PNG possesses plentiful natural resources, which, given effective management, could provide revenue to spur diversification and inclusive growth.

Independence 

In 1964 a joint mission to the territory by the Australian government and World Bank established a roadmap for economic and political progress. The territory was renamed PNG in 1972 before finally achieving independence three years later. The first elections were held in 1977, with Michael Somare sworn in as the first elected prime minister.

However, the following years were characterised by political instability, with a number of short-term governments and snap elections. A decade-long armed secessionist revolt on Bougainville Island in the 1980s and 1990s led to the loss of approximately 20,000 lives. In 1998 the violence ended in a ceasefire, before the signature of a peace agreement 2001.

The first elections for the government of the Autonomous Region of Bougainville (ARB) were subsequently held in 2005, with the people choosing former leader of the pro-independence movement, President Joseph Kabui. Elections were held again in 2010, with President John Momis taking office. The final portion of the peace agreement has a referendum on complete independence, which has been tentatively set for June 15, 2019. Prime Minister O’Neill currently serves greater PNG, having been elected in 2011 and re-elected in 2017.

Alotau II

The 111 members of Parliament are brought into office by preferential elections from single-member constituencies, with candidates receiving at least 50% of preference votes being elected. The ninth and most-recent general elections were held in 2017, with the People’s National Congress Party (PNCP) of incumbent Prime Minister O’Neill winning 27 seats, giving them the plurality of positions. The second-best-performing party was the National Alliance Party with 14 seats, and the Pangu Party came in third with 11.

Following the election, Prime Minister O’Neill and his PNCP members of Parliament (MPs) gathered in Alotau to take part in coalition talks with Sir Julius Chan’s People’s Progress Party, the Social Democrat Party and the United Resources Party (URP). As leader of the party with the most seats, Prime Minister O’Neill was asked to form the government, and he was re-elected by MPs in August 2017, with 60 votes to 46. Sam Basil’s Pangu Party joined the coalition the following month.

The coalition agreed to principles set out in the Alotau Accord II. Furthermore, the government’s strategic goals are integrated into Vision 2050 and the National Strategy for Responsible Sustainable Development. Specific plans were outlined in the Medium-Term Development Plan 2016-17, to be updated for 2018-22.

Party Jumping

PNG’s political landscape has been marked by party fragmentation, localism and patronage in recent years, causing politicians to engage in party- and coalition-hopping. Efforts have been made to counteract this, including the passage of the Organic Law on the Integrity of Political Parties and Candidates in 2001. The regulation sought to restrict MPs from switching parties, extend a grace period for the ruling government before a vote of no confidence could be submitted and prevent MPs who initially supported the government from joining the opposition.

Meanwhile, laws were introduced to enhance the authority of MPs over their localities. The District Services Improvement Programme, designed to direct state revenue towards local development, has also been expanded, though questions remain regarding the capacity of the local authorities who are tasked with managing these funds. One effect of this decentralisation has been increased power of MPs, which has led to the creation of large coalitions of governing parties.

Executive Powers

It is the mandate of the prime minister to appoint the heads of ministries, formally known as the National Executive Council (NEC). The NEC appointed following the 2017 election contains 33 members, including the leaders of seven political parties and two independent members of Parliament. Sam Basil, leader of the Pangu Party, joined the government later in 2017, replacing Francis Maneke. The PNCP is the largest party in the Cabinet, headed by Prime Minister O’Neill, who has been the national leader since 2006.

On top of leading the NEC, the prime minister has range of other appointing powers, such as for the head of the police force – the commissioner – who in turn names the head of the National Fraud and Anti-Corruption Directorate (NFACD). However, this body is protected by court order, and political and judicial conflict has recently ensued between the commissioner and the NFACD over attempts to prosecute government figures over corruption allegations.

Other important posts are occupied by Charles Abel, a member of the PNCP serving as deputy prime minister; Fabian Pok, URP-affiliated minister of petroleum; Sam Basil (Pangu Party), minister of information and energy; Justin Tkatchenko (PNCP), minister for lands and physical planning; Rimbink Pato (URP), minister of foreign affairs and trade; Richard Maru (PNCP), minister of planning and monitoring; and William Duma (URP), minister of public enterprise and state investment.

Parliamentary Procedures

The NEC forms policy and submits draft bills to the legislative branch, the National Parliament, which follows the Westminster model. However, there is no upper house in PNG. The assembly has 111 seats, of which 89 are elected from single-member open constituencies, 20 from province-level constituencies, and one each from the ARB and the National Capital District (NCD). The limited preferential voting system has been in use since 2007, under which voters list their top-three candidates.

In the previous general election in 2012, the PNCP also won the plurality of seats, with 27. That year the Triumph Heritage Empowerment Rural Party secured 12 seats, and the PNG Party won eight, with a total of 21 parties and 16 independents represented in Parliament. To date, no single party has ever won a majority of seats.

All bills must pass through the assembly before becoming law. In addition, MPs may pass a vote of no confidence in the government, causing it to resign; however, this cannot be submitted within 12 months preceding or 18 months following a general election.

Local Government

Since 1995 MPs elected from the provinces and the NCD have also been appointed as provincial governors. PNG has four geographical regions – Highlands, Islands, Momase and Papua – that serve no political function. Each province within a region has its own Provincial Assembly, which mirrors the structure of the Parliament. Provinces are divided into districts, which are made up of local-level government (LLG) areas. The ARB has three local government districts, each separated into LLGs, while the NCD is considered one district, subdivided in the same manner.

On top of receiving central government disbursements, provinces have tax-raising abilities, with the local MP or governor possessing considerable power over education, health and local economic development. There has also been an increase in the regional distribution of funds, with district authorities granting more power over spending and decision-making.

APEC 2018

PNG has the opportunity to showcase its investment potential, strengthen regional trade relationships and benefit from knowledge exchange as it chairs the APEC forum for the first time in 2018. The country expects to attract up to 20,000 visitors for APEC events and activities throughout the year, culminating in the main summit in November in Port Moresby. This will be attended by the leaders of the 21 member states, including the US, China and Japan. The main theme for APEC 2018 is “harnessing inclusive opportunities; embracing the digital future”. Aside from the direct economic benefits for tourism, hospitality, construction and real estate from such a large international event, the digitalisation agenda could help the country leapfrog in several key areas of economic development. PNG joined APEC in 1993, and this will be the largest multilateral forum ever hosted on domestic soil.

Outlook

Although external forces contributed to challenging economic conditions in recent times, the country should benefit from the stability brought about by Prime Minister O’Neill’s 2017 election victory, which solidifies the public agenda and provides more investor certainty. Hosting international events such as APEC 2018 should positively influence international perceptions and highlight opportunities available in the country, while planned investments in the extractive industries are positioned to boost the wider economy.